Farm Credit Canada highlights three disruptors in 2020

The federal ag lender says climate change, protectionism and automation are the issues to watch this year

Farm Credit Canada (FCC) believes there are three major factors that will disrupt Canadian agriculture in 2020, according to a prepared statement from the federal agency.

Those disruptors are climate change, protectionism and automation, which FCC chief agricultural economist J.P. Gervais said could promote or inhibit growth in the industry.

J.P. Gervais.
photo: Farm Credit Canada

“We call them disruptors for the simple fact that these trends could significantly change the way Canadian farm operations, agribusinesses and food processors do business at home and around the world. The test is how they will adapt to take advantage of the opportunities or mitigate the challenges that come with each of these trends,” Gervais commented in the prepared statement.

He noted that Canada has been warming at twice the rate as the rest of the world, which already has brought changes to the country’s growing season. That includes warmer weather generating more rain during planting and harvest periods along with greater potential for floods and droughts.

“As we’ve witnessed in recent years, weather disruptions can lead to production losses across major agriculture-producing regions, and this has serious and rippling repercussions for Canadian agriculture and food sectors,” Gervais said.

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Meanwhile, trade protectionism has generated volatility in the markets, which highlights the importance of having trade agreements with other countries, the chief agricultural economist stressed.

“Our trade agreements help buffer Canada from some of the negative impact that growing protectionism is having on the world economy. When tariffs are imposed or borders closed for any number of reasons, having a broader range of export markets allows Canadian exports to be reallocated, rather than simply reduced,” Gervais said.

As for automation, the FCC noted such can help solve labour shortages, reduce costs and increase efficiencies. Combined with low interest rates, this helps drive investments into developing new technologies.

“Canadian farm operations have been a bit more cautious about making new investments, given the recent decline in net income. But they also know that market conditions will eventually improve and that innovation is a long-term investment that eventually pays off,” Gervais said.

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